SlideShare a Scribd company logo
concept development workshop 
VicHealth physical activity 
innovation challenge
welcome 
DAVID HOOD 
@DavidAHood 
JULIAN WATERS-LYNCH 
@jwaterslynch 
join the conversation on twitter with 
@VicHealth 
@DoingSomeGood 
#VHinnov 
doing 
something good
workshop program 
• quick review of previous workshops 
• intro to Business Models and Business Model Innovation 
• develop Business Model Canvas for your Innovation 
Challenge concept 
• discuss social impact measurement 
• design an experiment to test your idea
purpose 
For you to leave with: 
• a good first go of your Business Model Canvas 
➡ final version to be submitted to VicHealth 
• ideas and insights in to how you can improve your concept
http://www.businessmodelgeneration.com/book
check in 
check in
CHECK IN 
1. What questions or comments do you have about the 
Business Model Canvas (BMC) so far?
CHECK IN 
1. What questions or comments do you have about the 
Business Model Canvas (BMC) so far? 
2. Which aspect/s of the Business Model Canvas (BMC) 
would you like to focus on today?
review
shaping great ideas 
Start with 
why 
Why are you doing this? What do you believe you can change? What do 
you believe you can make different/better/easier? What do you believe is 
possible? 
of the context 1 What is the current situation? Who does it impact? What is it’s impact on 
Build your understanding 
people, the planet, the economy? What are the possible causes? Observe. 
Listen. Learn. Enquire. 
Identify your target 
audience 
Who are you designing your service or product for? Be specific. Who 
believe’s what you believe? It’s not everybody. 
Get to know your target 
audience 
3 Seek to understand their needs and aspirations, what motivates them and 
their challenges. Develop user personas and user journeys to provide 
valuable insights. 
Identify the problem you 
are solving 
How does your idea help your target audience to get what they need or 
what they value? How does it help them to overcome challenges and 
barriers? 
Prototype and 
test ideas 
Gain insights into customers’ needs by designing and deploying the 
smallest amount of functionality possible (AKA your minimum viable 
product/service). Evolve the solution based on insights provided by 
engaged early adopters. 
1 
2 
3 
4 
5 
6
what are VicHealth looking for? 
Ideas that address the following criteria: 
1. Get more people physically active 
2. Point of difference: be clever, timely and unique. 
3. Equity: reach the hard to reach and move the hard to move. 
4. Scalability: able to be expanded, upscaled or transferred 
5. Sustainability: will be able to stand on its own two feet. 
6. Partners: recruited a project team that brings a unique perspective 
7. Sharable: documented your project so we can share it online 
8. Ready to roll!: must be able to test within 12 months
intro to HCD
THE FUTURE OF AUSTRALIAN SPORT 
SIX MEGATRENDS SHAPING THE SPORTS SECTOR
segments of non-club members 
with high potential for acquisition 
Adults 
1. Sidelined Sportsters 
2. Club Wary 
3. Ponderers 
! 
! 
Children 
1. Thrifty Enthusiasts 
2. Ponderers 
!
"Lean Startup" is a system for developing 
a business, product or service in the most 
efficient way possible to reduce the risk 
of failure. 
It is an approach that treats all ideas as 
having assumptions (or hypotheses) that 
must be validated by rapid 
experimentation in the marketplace. The 
approach relies on scientific 
experimentation, iterative product 
releases, and customers feedback to 
generate validated learning.
The key is to identify 
assumptions - would 
people actually buy or do 
this? Not by building the 
whole product, but by 
building a Minimum 
Viable Product (MVP). 
The MVP is the most basic 
version of your product that 
is valuable to your user, that 
will enable you to test and 
learn.
5 
4 
3 
2 
1 
Get more people 
physically active 
5 
4 
3 
2 
1 
Point of 
difference 
5 
4 
3 
2 
1 
Equity 
5 
4 
3 
2 
1 
Scalability 
5 
4 
3 
2 
1 
Sustainability 
5 
4 
3 
2 
1 
Partners 
5 
4 
3 
2 
1 
Sharable 
5 
4 
3 
2 
1 
Ready to roll 
How would you score yourself so far? 
VicHealth is committed to getting people 
more active. The more physical activity you 
do, the better your health! So, the more 
people you can get being active, the more 
impressed we’ll be. Need we say more? 
We’re offering start-up funding 
to kick-start smart ideas. Your 
project should be clever, 
timely and unique. Use your 
imagination and think big! 
We will be impressed by 
proposals that cater for 
everyone, including those that 
are less likely to participate. 
Will your project be fair, 
accessible and inclusive? 
We want to invest in ideas 
that have the potential to 
go from good to great. Will 
it be expanded, upscaled 
or transferred over time? 
VicHealth can give you a kick 
start, but your project will 
need to stand on its own two 
feet in time. Make sure you 
think about the long term 
business model from the start. 
VicHealth plays a team game. 
Who have you recruited to your 
project team that brings a 
unique perspective, are they 
social entrepreneurs? Are they 
corporate hot shots? Are they 
changemakers? 
We want to get as many 
people talking about your 
project as possible - so 
whatever you do needs to be 
documented in some way that 
we can share online (photos 
and video are our favourites)! 
You must be able to 
test your project 
within 12 months of 
receiving start-up 
funding
Having a great idea doesn't guarantee success. 
A great business idea must also have a great 
business model to support and sustain it. 
Alex Osterwalder
intro to business models
8.40 5 mins 
What is a business model?
Who has used BMC before this workshop? 
What are the advantages of BMC over traditional BP? 
What was easy about it? 
What was hard? 
Remaining questions? 
What is most useful to explore today?
Def_Business Model 
A business model describes 
the rationale of how an 
organisation creates, delivers, 
and captures value. 
Source: Business Model Generation
Which part needs more detail? 
What 
Who 
Why 
How 
Value 
Unclear Clear 
Unclear Clear 
Unclear Clear 
Unclear Clear 
Unclear Clear
business model innovation
Innovators 
2.5% 
Edge 
Early 
Adopters 
13.5% 
Early 
Majority 
34% 
Late 
Majority 
34% 
Laggards 
16% 
Core 
Chasm
The Business 
Model Canvas 
A shared language for describing, visualizing, 
assessing, and changing business models
The Business Model Canvas is a tool for 
you to design, analyse, test and describe 
your business model and how your 
organisation intends to create, deliver, 
and capture value in a profitable way.
Why use Business Model Canvas? 
Fundamentally, it delivers three things: 
1. Focus: Stripping away the 40+ pages of ‘stuff’ in a traditional business 
plan, it can help to clarify and focus on what’s driving the business (and 
what’s non-core and getting in the way). 
2. Flexibility: It’s a lot easier to tweak the model and try things (from a 
planning perspective) with something that’s sitting on a single page. 
3. Transparency: Your team will have a much easier time understanding 
your business model and be much more likely to buy in to your vision 
when it’s laid out on a single page.
OFFER 
CUSTOMER 
RELATIONSHIPS 
personal! 
DISTRIBUTION 
CHANNELS 
CUSTOMER 
SEGMENTS 
KEY 
ACTIVITIES 
risk 
management! 
lending & 
collecting 
payments! 
branches! 
brand/ 
trust! 
COST STRUCTURE REVENUE STREAMS 
PARTNER 
NETWORK 
KEY 
RESOURCES 
ʻs business model 
poor 
entrepreneurs! 
branches! 
micro-loans! 
capital! 
government! 
people! 
capital 
costs! 
interest 
rates!
getting started
order 
CS VP CH CR 
Customer 
Segments 
An organization serves 
one or several Customer 
Segments. 
Value 
Propositions 
It seeks to solve customer 
problems and satisfy 
customer needs with 
value propositions. 
Channels 
Value propositions 
are delivered to customers 
through communication, 
distribution, and sales 
Channels. 
Customer 
Relationships 
Customer relationships 
are established and 
maintained with each 
Customer Segment. 
1 2 3 4
R$ KR KA KP C$ 
Revenue 
Streams 
Revenue streams result 
from value propositions 
successfully oΩered to 
customers. 
Key 
Resources 
Key resources are the 
assets required to oΩer 
and deliver the previously 
described elements . . . 
Key 
Activities 
. . . by performing a num-ber 
of Key Activities. 
Key 
Partnerships 
Some activities are 
outsourced and some 
resources are acquired 
outside the enterprise. 
Cost 
Structure 
The business model 
elements result in the 
cost structure. 
5 6 7 8 9
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess 
guess guess
• use multi-coloured post-its 
• can use editable version of PDF
9 business model canvas building blocks 
1. description of each block - role/function 
2. key question and supporting questions to be asked 
3. examples of types of responses 
4. things to think about 
5. case study 
6. work on your own Business Model Canvas 
7. questions for Jules and David
1. customer segments
The Customer Segments Building Block 
defines the different groups of people or 
organizations an enterprise aims to 
reach and serve.
Customer Segments 
There are different types of market segments: 
1. Mass market 
2. Niche market 
3. Segmented 
4. Diversified 
5. Multi-sided platforms (or multi-sided markets)
Key Questions 
1. For whom are we creating value? 
2. Who are our most important customers?
segments of non-club members 
with high potential for acquisition 
Adults 
1. Sidelined Sportsters 
2. Club Wary 
3. Ponderers 
! 
! 
Children 
1. Thrifty Enthusiasts 
2. Ponderers 
!
sidelined sportsters
club wary
ponderers
thrifty enthusiasts
ponderers
tips 
Customer groups represent separate segments if: 
• Their needs require and justify a distinct offer 
• They are reached through different Distribution Channels 
• They require different types of relationships 
• They have substantially different profitabilities 
• They are willing to pay for different aspects of the offer
activity 
1. Which market segment are you targeting? 
2. Is there a particular niche within that market segment that 
you are targeting? What is it?
next… 
• develop 2-3 personas for each of your customer segments 
• identify what they value & identify what problems they 
have 
• identify the barriers they face to getting active 
• map out a day in the life for each customer segment 
• what is their usual routine? 
• what are their habits? 
• which trend/s are you tapping in to with your concept?
2. VALUE PROPOSITIONS
The Value Propositions Building Block 
describes the bundle of products and 
services that create value for a specific 
Customer Segment.
Value Propositions 
Elements from the following non-exhaustive list of quantitative or 
qualitative values can contribute to customer value creation: 
1. Newness 
7. Price 
2. Performance 
8. Cost reduction 
3. Customization 
9. Risk reduction 
4. “Getting the job done” 
10. Accessibility 
5. Design 
11. Convenience/Usability 
6. Brand/status
Key Questions 
1. What value do we deliver to the customer? 
2. Which one of our customer’s problems are we helping to 
solve? 
3. Which customer needs are we satisfying? 
4. What bundles of products and services are we offering to 
each Customer Segment?
Simple Fix for Blown Head Gaskets 
! 
Repairs Blown Head Gaskets in 
Just One Hour
Tips 
• Make it as plain as day 
• Use your customer’s language. How would they describe 
the benefits themselves? 
• Strengthen your case 
• Customer testimonials 
• Assurance 
• Social proof
3. channels
The Channels Building Block describes 
how a company communicates with and 
reaches its Customer Segments to 
deliver a Value Proposition.
Channels 
Channels serve several functions, including: 
• Raising awareness among customers about a company’s 
products and services 
• Helping customers evaluate a company’s Value Proposition 
• Allowing customers to purchase specific products and 
services 
• Delivering a Value Proposition to customers 
• Providing post-purchase customer support
Channel Types & Phases
Key Questions 
1. Through which Channels do our Customer Segments want 
to be reached? 
2. How are we reaching them now? 
3. How are our Channels integrated? 
4. Which ones work best? 
5. Which ones are most cost-efficient? 
6. How are we integrating them with customer routines?
Activity 
Create a user journey map for each of your personas: 
• What touch points do they have with you? 
• Where are you best able to give them maximum value on (i.e. 
a great experience)? 
• Which ones might be costing you a good deal but not 
providing much value for customers? 
• Which ones could you potentially create a lot more value 
through without much effort or resources?
Tourism Australia
4. customer relationships
The Customer Relationships Building 
Block describes the types of 
relationships a company establishes with 
specific Customer Segments.
Customer Relationships 
Relationships can range from personal to automated. 
Customer relationships may be driven by the following 
motivations: 
1. Customer acquisition 
2. Customer retention 
3. Boosting sales (upselling)
Key Questions 
1. What type of relationship does each of our Customer 
Segments expect us to establish and maintain with them 
2. Which ones have we established? 
3. How costly are they? 
4. How are they integrated with the rest of our business 
model?
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance 
2. Dedicated Personal Assistance
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance 
2. Dedicated Personal Assistance 
3. Self-service
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance 
2. Dedicated Personal Assistance 
3. Self-service 
4. Automated services
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance 
2. Dedicated Personal Assistance 
3. Self-service 
4. Automated services 
5. Communities
Customer Relationships 
We can distinguish between several categories of Customer 
Relationships, which may co-exist in a company’s relationship 
with a particular Customer Segment: 
1. Personal Assistance 
2. Dedicated Personal Assistance 
3. Self-service 
4. Automated services 
5. Communities 
6. Cocreation
customer development principles 
1. There Are No Facts Inside Your 
Building, So Get Outside 
2. Failure is an Integral Part of the 
Search for the Business Model 
3. Iterations and Pivots are Driven by 
Insight 
4. Validate Your Hypotheses with 
Experiments 
5. Success Begins with Buy-In from 
Investors and Co-Founders 
6. No Business Plan Survives First 
Contact with Customers 
7. Not All Startups Are Alike 
8. If it’s not About Passion, You’re 
Dead the Day You Opened your 
Doors 
9. Preserve Cash While Searching. 
After It’s Found, Spend 
10.Communicate and Share Learning
5. revenue streams
The Revenue Streams Building Block 
represents the cash a company 
generates from each Customer Segment 
(costs must be subtracted from revenues 
to create earnings).
Revenue Streams 
A business model can involve two different types of Revenue 
Streams: 
1. Transaction revenues resulting from one-time customer 
payments 
2. Recurring revenues resulting from ongoing payments to 
either deliver a Value Proposition to customers or provide 
post-purchase customer support
Key Questions 
• For what value are customers willing to pay? 
• How much are they willing to pay? 
• How do they want to pay? 
• How will you price your product or services? Will it be a one off 
purchase? Will their be tiered pricing structure? Will it be fixed, 
variable or subscription? 
• What are other sources of revenue? How much do they contribute 
to overall revenue?
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting 
5. Licensing
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting 
5. Licensing 
6. Brokerage fees
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting 
5. Licensing 
6. Brokerage fees 
7. Advertising
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting 
5. Licensing 
6. Brokerage fees 
7. Advertising 
8. Freemium
Revenue Streams 
There are several ways to generate revenue: 
1. Asset Sale 
2. Usage Fee 
3. Subscription Fees 
4. Lending/Leasing/Renting 
5. Licensing 
6. Brokerage fees 
7. Advertising 
8. Freemium 
9. Crowdfunding
Fixed Menu Pricing 
Pricing Mechanisms 
Predefined prices are based on static variables 
Dynamic Pricing 
Prices change based on market conditions 
List price Fixed prices for individual products, services, 
or other Value Propositions 
Negotiation 
(bargaining) 
Price negotiated between two or more partners 
depending on negotiation power and/or negotiation skills 
Product feature 
dependent 
Price depends on the number or quality of 
Value Proposition features 
Yield management Price depends on inventory and time of purchase 
(normally used for perishable resources such as hotel 
rooms or airline seats) 
Customer segment 
dependent 
Price depends on the type and characteristic 
of a Customer Segment 
Real-time-market Price is established dynamically based on supply 
and demand 
Volume dependent Price as a function of the quantity purchased Auctions Price determined by outcome of competitive bidding
Payment 
Providers 
Distribution 
Partners 
Telco 
Partners 
Software 
Development 
Software 
Developers 
Software 
Free Internet & 
Video Calling 
Cheap Calls to 
Phones 
(SkypeOut) 
Mass 
Customized 
Skype.com 
Headset 
Partnerships 
Web Users 
Globally 
People Who 
Want to Call 
Phones 
Software 
Development 
Complaint 
Management Free 
SkypeOut Pre- 
Paid or 
Subscription 
Hardware 
Sales 
Diagram from Alex Osterwalder, Business Model Generation
6. key resources
The Key Resources Building Block 
describes the most important assets 
required to make a business model work.
Key Resources 
Key Resources can be categorised as follows: 
1. Physical
Key Resources 
Key Resources can be categorised as follows: 
1. Physical 
2. Intellectual
Key Resources 
Key Resources can be categorised as follows: 
1. Physical 
2. Intellectual 
3. Human
Key Resources 
Key Resources can be categorised as follows: 
1. Physical 
2. Intellectual 
3. Human 
4. Financial
Key Questions 
• What physical, intellectual, human and financial resources 
will you need to deliver your: 
•Value proposition? 
•Distribution channels? 
•Customer relationships? 
•Revenue streams?
7. key activities
The Key Activities Building Block 
describes the most important things a 
company must do to make its business 
model work.
Key Activities 
Key Activities can be categorised as follows: 
1. Production
Key Activities 
Key Activities can be categorised as follows: 
1. Production 
2. Problem solving
Key Activities 
Key Activities can be categorised as follows: 
1. Production 
2. Problem solving 
3. Platform/network
Key Questions 
• What key activities are require to deliver your: 
•value propositions? 
•distribution channels? 
•customer relationships? 
•revenue streams?
8. key partnerships
The Key Partnerships Building Block 
describes the network of suppliers and 
partners that make the business model 
work.
Key Partnerships 
We can distinguish between four different types of 
partnerships: 
1. Strategic alliances between non-competitors
Key Partnerships 
We can distinguish between four different types of 
partnerships: 
1. Strategic alliances between non-competitors 
2. Coopetition: strategic partnerships between competitors
Key Partnerships 
We can distinguish between four different types of 
partnerships: 
1. Strategic alliances between non-competitors 
2. Coopetition: strategic partnerships between competitors 
3. Joint ventures to develop new business
Key Partnerships 
We can distinguish between four different types of 
partnerships: 
1. Strategic alliances between non-competitors 
2. Coopetition: strategic partnerships between competitors 
3. Joint ventures to develop new business 
4. Buyer-supplier relationships to assure reliable supplies
Key Partnerships 
It can be useful to distinguish between three motivations for 
creating partnerships: 
1. Optimisation and economy of scale
Key Partnerships 
It can be useful to distinguish between three motivations for 
creating partnerships: 
1. Optimisation and economy of scale 
2. Reduction of risk and uncertainty
Key Partnerships 
It can be useful to distinguish between three motivations for 
creating partnerships: 
1. Optimisation and economy of scale 
2. Reduction of risk and uncertainty 
3. Acquisition of particular resources and activities
Key Questions 
• Who are your key partners? 
• Who are your key suppliers? 
• Who can help you fill any resource gaps or help you provide 
greater value to customers? 
• Who can provide distribution or marketing channels to help 
you reach your target audience? 
• What key activities might they deliver?
9. cost structure
The Cost Structure describes all costs 
incurred to operate a business model.
Cost Structures 
Naturally enough, costs should be minimized in every 
business model. But low Cost Structures are more important 
to some business models than to others. Therefore it can be 
useful to distinguish between two broad classes of business 
model Cost Structures: cost-driven and value-driven (many 
business models fall in between these two extremes): 
1. Cost driven
Cost Structures 
Naturally enough, costs should be minimized in every 
business model. But low Cost Structures are more important 
to some business models than to others. Therefore it can be 
useful to distinguish between two broad classes of business 
model Cost Structures: cost-driven and value-driven (many 
business models fall in between these two extremes): 
1. Cost driven 
2. Value driven
Cost Structures 
Cost structures can have the following characteristics: 
1. Fixed costs
Cost Structures 
Cost structures can have the following characteristics: 
1. Fixed costs 
2. Variable costs
Cost Structures 
Cost structures can have the following characteristics: 
1. Fixed costs 
2. Variable costs 
3. Economies of scale
Cost Structures 
Cost structures can have the following characteristics: 
1. Fixed costs 
2. Variable costs 
3. Economies of scale 
4. Economies of scope
Key Questions 
• How much will it cost to initially develop the value 
proposition? 
• What are the most important costs? 
• What’s the cost of your MVP? 
• What key resources and activities are most expensive?
social impact measurement
What does success look like?
What can you learn?
#ImpactAU2014$ 
PAY(FOR(FAILURE(OR(INVEST(IN(SUCCESS?(
CONNECTICUT(STATE(RESULTS( 
POLICY DATA 
Between(2000(and(2010(( Between(2000(and(2010(( 
Raised$the$Age$from$16$to$18$ 
Status$offenders$removed$from$ 
deten)on$ 
Con)nuum$of$therapeu)c$and$ 
evidence^based$services$at$the$ 
community$level$ 
Progress$toward$reducing$ 
dispropor)onality$ 
Over$80%$of$youth$comple)ng$ 
supervision$without$re^arrest$ 
The$number$of$juveniles$referred$ 
to$the$court$is$down$30%$$ 
#ImpactAU2014$ 
Investment$in$family^based$services$ 
for$court^involved$youth$from$ 
$300,000$to$$39,000,000$ 
Recidivism$at$12$months$is$below$ 
50%$
NEW(YORK(POLICY(RESULTS( 
Between(2010(and(2012 
New$&$Stronger$Rela)onships$Across$the$System$ 
Deeper$Knowledge$of$Programs$&$Services$ 
Significant$Policy$Changes:$The$Close$to$Home$&$Raise$The$Age$ 
Commitment$to$Data^Driven$Decision$Making$ 
Engagement$of$Local$Communi)es$ 
Empowerment$of$New$Stakeholders$ 
Exponen)al$Level$of$Original$Investment$ 
#ImpactAU2014$
NEW(YORK(QUANTIFIABLE(RESULTS( 
Between(2010(and(2012 
Juvenile$arrests$dropped$by$24%$ 
Juveniles$admiSed$to$deten)on$declined$by$23%$ 
Juvenile$proba)on$intake$cases$declined$by$20%$ 
Juvenile$pe))ons$filed$declined$by$21%$ 
Juvenile$admissions$in$state$placement$were$down$28%$ 
Number$of$youth$in$state$custody$declined$by$45%$ 
$ 
#ImpactAU2014$
minimum viable product 
Barn Suppers. Image courtesy of Philip Dunda
testing assumptions
“Don’t test your ideas. Test the assumptions 
that have to be true to make your ideas 
work.” 
Teresa Torres
Lean Startup Experiments 
Assumption Testing! 
Experiment Design! 
Hypothesis Participants 
!! 
Approach & Activities 
!! 
Expected Data 
& Actual Data 
Learning Goals & 
Outcomes 
Decision 
BMC Iteration
criteria 
1. Are there customers who will buy what you sell? What 
evidence do you have? 
2. Who are your competitors? Not just for similar products but 
for funds, time, attention? 
3. Why would customers use your product or service instead of 
the competition? How different are you from the competition? 
4. How will you respond to new competition?
criteria 
5. Is this financially viable/sustainable? 
6. Is this replicable and/or scalable? How will you increase 
your reach or impact?
the 
pitch
what makes a great pitch? 
1. Start with why. 
1. What’s the problem you’re solving.? 
2. Why is it important? 
3. What’s the impact? Use memorable facts, figures, anecdotes and 
metaphors. 
2. What’s your solution? 
3. Who’s your audience? 
4. What do they value? 
5. How is your idea different from others out there?
what makes a great pitch? 
6. Who are you partnering with? 
7. What are you building on that already exists? 
8. Where are you in the stage of implementing your idea? 
9. What do you need to take the next step? 
10. How can we help you get there? What would you like us to do? 
11. Share your passion. 
12. Finish with your tagline.
rocket launch
thank you 
DAVID HOOD 
@DavidAHood 
JULIAN WATERS-LYNCH 
@jwaterslynch 
join the conversation on twitter with 
@VicHealth 
@DoingSomeGood 
#VHinnov 
doing 
something good
VicHealth Physical Activity Innovation Challenge Concept Development Workshop slides

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VicHealth Physical Activity Innovation Challenge Concept Development Workshop slides

  • 1. concept development workshop VicHealth physical activity innovation challenge
  • 2. welcome DAVID HOOD @DavidAHood JULIAN WATERS-LYNCH @jwaterslynch join the conversation on twitter with @VicHealth @DoingSomeGood #VHinnov doing something good
  • 3.
  • 4. workshop program • quick review of previous workshops • intro to Business Models and Business Model Innovation • develop Business Model Canvas for your Innovation Challenge concept • discuss social impact measurement • design an experiment to test your idea
  • 5. purpose For you to leave with: • a good first go of your Business Model Canvas ➡ final version to be submitted to VicHealth • ideas and insights in to how you can improve your concept
  • 8. CHECK IN 1. What questions or comments do you have about the Business Model Canvas (BMC) so far?
  • 9. CHECK IN 1. What questions or comments do you have about the Business Model Canvas (BMC) so far? 2. Which aspect/s of the Business Model Canvas (BMC) would you like to focus on today?
  • 11. shaping great ideas Start with why Why are you doing this? What do you believe you can change? What do you believe you can make different/better/easier? What do you believe is possible? of the context 1 What is the current situation? Who does it impact? What is it’s impact on Build your understanding people, the planet, the economy? What are the possible causes? Observe. Listen. Learn. Enquire. Identify your target audience Who are you designing your service or product for? Be specific. Who believe’s what you believe? It’s not everybody. Get to know your target audience 3 Seek to understand their needs and aspirations, what motivates them and their challenges. Develop user personas and user journeys to provide valuable insights. Identify the problem you are solving How does your idea help your target audience to get what they need or what they value? How does it help them to overcome challenges and barriers? Prototype and test ideas Gain insights into customers’ needs by designing and deploying the smallest amount of functionality possible (AKA your minimum viable product/service). Evolve the solution based on insights provided by engaged early adopters. 1 2 3 4 5 6
  • 12. what are VicHealth looking for? Ideas that address the following criteria: 1. Get more people physically active 2. Point of difference: be clever, timely and unique. 3. Equity: reach the hard to reach and move the hard to move. 4. Scalability: able to be expanded, upscaled or transferred 5. Sustainability: will be able to stand on its own two feet. 6. Partners: recruited a project team that brings a unique perspective 7. Sharable: documented your project so we can share it online 8. Ready to roll!: must be able to test within 12 months
  • 14.
  • 15. THE FUTURE OF AUSTRALIAN SPORT SIX MEGATRENDS SHAPING THE SPORTS SECTOR
  • 16. segments of non-club members with high potential for acquisition Adults 1. Sidelined Sportsters 2. Club Wary 3. Ponderers ! ! Children 1. Thrifty Enthusiasts 2. Ponderers !
  • 17. "Lean Startup" is a system for developing a business, product or service in the most efficient way possible to reduce the risk of failure. It is an approach that treats all ideas as having assumptions (or hypotheses) that must be validated by rapid experimentation in the marketplace. The approach relies on scientific experimentation, iterative product releases, and customers feedback to generate validated learning.
  • 18. The key is to identify assumptions - would people actually buy or do this? Not by building the whole product, but by building a Minimum Viable Product (MVP). The MVP is the most basic version of your product that is valuable to your user, that will enable you to test and learn.
  • 19.
  • 20.
  • 21. 5 4 3 2 1 Get more people physically active 5 4 3 2 1 Point of difference 5 4 3 2 1 Equity 5 4 3 2 1 Scalability 5 4 3 2 1 Sustainability 5 4 3 2 1 Partners 5 4 3 2 1 Sharable 5 4 3 2 1 Ready to roll How would you score yourself so far? VicHealth is committed to getting people more active. The more physical activity you do, the better your health! So, the more people you can get being active, the more impressed we’ll be. Need we say more? We’re offering start-up funding to kick-start smart ideas. Your project should be clever, timely and unique. Use your imagination and think big! We will be impressed by proposals that cater for everyone, including those that are less likely to participate. Will your project be fair, accessible and inclusive? We want to invest in ideas that have the potential to go from good to great. Will it be expanded, upscaled or transferred over time? VicHealth can give you a kick start, but your project will need to stand on its own two feet in time. Make sure you think about the long term business model from the start. VicHealth plays a team game. Who have you recruited to your project team that brings a unique perspective, are they social entrepreneurs? Are they corporate hot shots? Are they changemakers? We want to get as many people talking about your project as possible - so whatever you do needs to be documented in some way that we can share online (photos and video are our favourites)! You must be able to test your project within 12 months of receiving start-up funding
  • 22. Having a great idea doesn't guarantee success. A great business idea must also have a great business model to support and sustain it. Alex Osterwalder
  • 24. 8.40 5 mins What is a business model?
  • 25. Who has used BMC before this workshop? What are the advantages of BMC over traditional BP? What was easy about it? What was hard? Remaining questions? What is most useful to explore today?
  • 26. Def_Business Model A business model describes the rationale of how an organisation creates, delivers, and captures value. Source: Business Model Generation
  • 27.
  • 28.
  • 29. Which part needs more detail? What Who Why How Value Unclear Clear Unclear Clear Unclear Clear Unclear Clear Unclear Clear
  • 31.
  • 32.
  • 33.
  • 34.
  • 35. Innovators 2.5% Edge Early Adopters 13.5% Early Majority 34% Late Majority 34% Laggards 16% Core Chasm
  • 36. The Business Model Canvas A shared language for describing, visualizing, assessing, and changing business models
  • 37. The Business Model Canvas is a tool for you to design, analyse, test and describe your business model and how your organisation intends to create, deliver, and capture value in a profitable way.
  • 38.
  • 39.
  • 40.
  • 41. Why use Business Model Canvas? Fundamentally, it delivers three things: 1. Focus: Stripping away the 40+ pages of ‘stuff’ in a traditional business plan, it can help to clarify and focus on what’s driving the business (and what’s non-core and getting in the way). 2. Flexibility: It’s a lot easier to tweak the model and try things (from a planning perspective) with something that’s sitting on a single page. 3. Transparency: Your team will have a much easier time understanding your business model and be much more likely to buy in to your vision when it’s laid out on a single page.
  • 42.
  • 43.
  • 44. OFFER CUSTOMER RELATIONSHIPS personal! DISTRIBUTION CHANNELS CUSTOMER SEGMENTS KEY ACTIVITIES risk management! lending & collecting payments! branches! brand/ trust! COST STRUCTURE REVENUE STREAMS PARTNER NETWORK KEY RESOURCES ʻs business model poor entrepreneurs! branches! micro-loans! capital! government! people! capital costs! interest rates!
  • 46.
  • 47. order CS VP CH CR Customer Segments An organization serves one or several Customer Segments. Value Propositions It seeks to solve customer problems and satisfy customer needs with value propositions. Channels Value propositions are delivered to customers through communication, distribution, and sales Channels. Customer Relationships Customer relationships are established and maintained with each Customer Segment. 1 2 3 4
  • 48. R$ KR KA KP C$ Revenue Streams Revenue streams result from value propositions successfully oΩered to customers. Key Resources Key resources are the assets required to oΩer and deliver the previously described elements . . . Key Activities . . . by performing a num-ber of Key Activities. Key Partnerships Some activities are outsourced and some resources are acquired outside the enterprise. Cost Structure The business model elements result in the cost structure. 5 6 7 8 9
  • 49. guess guess guess guess guess guess guess guess guess guess guess guess guess guess guess guess
  • 50. • use multi-coloured post-its • can use editable version of PDF
  • 51.
  • 52. 9 business model canvas building blocks 1. description of each block - role/function 2. key question and supporting questions to be asked 3. examples of types of responses 4. things to think about 5. case study 6. work on your own Business Model Canvas 7. questions for Jules and David
  • 54. The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.
  • 55. Customer Segments There are different types of market segments: 1. Mass market 2. Niche market 3. Segmented 4. Diversified 5. Multi-sided platforms (or multi-sided markets)
  • 56. Key Questions 1. For whom are we creating value? 2. Who are our most important customers?
  • 57. segments of non-club members with high potential for acquisition Adults 1. Sidelined Sportsters 2. Club Wary 3. Ponderers ! ! Children 1. Thrifty Enthusiasts 2. Ponderers !
  • 63. tips Customer groups represent separate segments if: • Their needs require and justify a distinct offer • They are reached through different Distribution Channels • They require different types of relationships • They have substantially different profitabilities • They are willing to pay for different aspects of the offer
  • 64. activity 1. Which market segment are you targeting? 2. Is there a particular niche within that market segment that you are targeting? What is it?
  • 65. next… • develop 2-3 personas for each of your customer segments • identify what they value & identify what problems they have • identify the barriers they face to getting active • map out a day in the life for each customer segment • what is their usual routine? • what are their habits? • which trend/s are you tapping in to with your concept?
  • 67. The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment.
  • 68. Value Propositions Elements from the following non-exhaustive list of quantitative or qualitative values can contribute to customer value creation: 1. Newness 7. Price 2. Performance 8. Cost reduction 3. Customization 9. Risk reduction 4. “Getting the job done” 10. Accessibility 5. Design 11. Convenience/Usability 6. Brand/status
  • 69. Key Questions 1. What value do we deliver to the customer? 2. Which one of our customer’s problems are we helping to solve? 3. Which customer needs are we satisfying? 4. What bundles of products and services are we offering to each Customer Segment?
  • 70. Simple Fix for Blown Head Gaskets ! Repairs Blown Head Gaskets in Just One Hour
  • 71. Tips • Make it as plain as day • Use your customer’s language. How would they describe the benefits themselves? • Strengthen your case • Customer testimonials • Assurance • Social proof
  • 72.
  • 73.
  • 74.
  • 76. The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.
  • 77. Channels Channels serve several functions, including: • Raising awareness among customers about a company’s products and services • Helping customers evaluate a company’s Value Proposition • Allowing customers to purchase specific products and services • Delivering a Value Proposition to customers • Providing post-purchase customer support
  • 78. Channel Types & Phases
  • 79. Key Questions 1. Through which Channels do our Customer Segments want to be reached? 2. How are we reaching them now? 3. How are our Channels integrated? 4. Which ones work best? 5. Which ones are most cost-efficient? 6. How are we integrating them with customer routines?
  • 80. Activity Create a user journey map for each of your personas: • What touch points do they have with you? • Where are you best able to give them maximum value on (i.e. a great experience)? • Which ones might be costing you a good deal but not providing much value for customers? • Which ones could you potentially create a lot more value through without much effort or resources?
  • 82.
  • 83.
  • 84.
  • 85.
  • 86.
  • 87.
  • 88.
  • 89.
  • 90.
  • 91.
  • 92.
  • 93.
  • 94.
  • 95.
  • 96.
  • 97.
  • 98.
  • 100. The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments.
  • 101. Customer Relationships Relationships can range from personal to automated. Customer relationships may be driven by the following motivations: 1. Customer acquisition 2. Customer retention 3. Boosting sales (upselling)
  • 102. Key Questions 1. What type of relationship does each of our Customer Segments expect us to establish and maintain with them 2. Which ones have we established? 3. How costly are they? 4. How are they integrated with the rest of our business model?
  • 103. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance
  • 104. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance
  • 105. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service
  • 106. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services
  • 107. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services 5. Communities
  • 108. Customer Relationships We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services 5. Communities 6. Cocreation
  • 109.
  • 110. customer development principles 1. There Are No Facts Inside Your Building, So Get Outside 2. Failure is an Integral Part of the Search for the Business Model 3. Iterations and Pivots are Driven by Insight 4. Validate Your Hypotheses with Experiments 5. Success Begins with Buy-In from Investors and Co-Founders 6. No Business Plan Survives First Contact with Customers 7. Not All Startups Are Alike 8. If it’s not About Passion, You’re Dead the Day You Opened your Doors 9. Preserve Cash While Searching. After It’s Found, Spend 10.Communicate and Share Learning
  • 112. The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings).
  • 113. Revenue Streams A business model can involve two different types of Revenue Streams: 1. Transaction revenues resulting from one-time customer payments 2. Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support
  • 114. Key Questions • For what value are customers willing to pay? • How much are they willing to pay? • How do they want to pay? • How will you price your product or services? Will it be a one off purchase? Will their be tiered pricing structure? Will it be fixed, variable or subscription? • What are other sources of revenue? How much do they contribute to overall revenue?
  • 115. Revenue Streams There are several ways to generate revenue: 1. Asset Sale
  • 116. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee
  • 117. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees
  • 118. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting
  • 119. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing
  • 120. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees
  • 121. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees 7. Advertising
  • 122. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees 7. Advertising 8. Freemium
  • 123. Revenue Streams There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees 7. Advertising 8. Freemium 9. Crowdfunding
  • 124. Fixed Menu Pricing Pricing Mechanisms Predefined prices are based on static variables Dynamic Pricing Prices change based on market conditions List price Fixed prices for individual products, services, or other Value Propositions Negotiation (bargaining) Price negotiated between two or more partners depending on negotiation power and/or negotiation skills Product feature dependent Price depends on the number or quality of Value Proposition features Yield management Price depends on inventory and time of purchase (normally used for perishable resources such as hotel rooms or airline seats) Customer segment dependent Price depends on the type and characteristic of a Customer Segment Real-time-market Price is established dynamically based on supply and demand Volume dependent Price as a function of the quantity purchased Auctions Price determined by outcome of competitive bidding
  • 125. Payment Providers Distribution Partners Telco Partners Software Development Software Developers Software Free Internet & Video Calling Cheap Calls to Phones (SkypeOut) Mass Customized Skype.com Headset Partnerships Web Users Globally People Who Want to Call Phones Software Development Complaint Management Free SkypeOut Pre- Paid or Subscription Hardware Sales Diagram from Alex Osterwalder, Business Model Generation
  • 127. The Key Resources Building Block describes the most important assets required to make a business model work.
  • 128. Key Resources Key Resources can be categorised as follows: 1. Physical
  • 129. Key Resources Key Resources can be categorised as follows: 1. Physical 2. Intellectual
  • 130. Key Resources Key Resources can be categorised as follows: 1. Physical 2. Intellectual 3. Human
  • 131. Key Resources Key Resources can be categorised as follows: 1. Physical 2. Intellectual 3. Human 4. Financial
  • 132. Key Questions • What physical, intellectual, human and financial resources will you need to deliver your: •Value proposition? •Distribution channels? •Customer relationships? •Revenue streams?
  • 134. The Key Activities Building Block describes the most important things a company must do to make its business model work.
  • 135. Key Activities Key Activities can be categorised as follows: 1. Production
  • 136. Key Activities Key Activities can be categorised as follows: 1. Production 2. Problem solving
  • 137. Key Activities Key Activities can be categorised as follows: 1. Production 2. Problem solving 3. Platform/network
  • 138. Key Questions • What key activities are require to deliver your: •value propositions? •distribution channels? •customer relationships? •revenue streams?
  • 140. The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work.
  • 141. Key Partnerships We can distinguish between four different types of partnerships: 1. Strategic alliances between non-competitors
  • 142. Key Partnerships We can distinguish between four different types of partnerships: 1. Strategic alliances between non-competitors 2. Coopetition: strategic partnerships between competitors
  • 143. Key Partnerships We can distinguish between four different types of partnerships: 1. Strategic alliances between non-competitors 2. Coopetition: strategic partnerships between competitors 3. Joint ventures to develop new business
  • 144. Key Partnerships We can distinguish between four different types of partnerships: 1. Strategic alliances between non-competitors 2. Coopetition: strategic partnerships between competitors 3. Joint ventures to develop new business 4. Buyer-supplier relationships to assure reliable supplies
  • 145. Key Partnerships It can be useful to distinguish between three motivations for creating partnerships: 1. Optimisation and economy of scale
  • 146. Key Partnerships It can be useful to distinguish between three motivations for creating partnerships: 1. Optimisation and economy of scale 2. Reduction of risk and uncertainty
  • 147. Key Partnerships It can be useful to distinguish between three motivations for creating partnerships: 1. Optimisation and economy of scale 2. Reduction of risk and uncertainty 3. Acquisition of particular resources and activities
  • 148. Key Questions • Who are your key partners? • Who are your key suppliers? • Who can help you fill any resource gaps or help you provide greater value to customers? • Who can provide distribution or marketing channels to help you reach your target audience? • What key activities might they deliver?
  • 150. The Cost Structure describes all costs incurred to operate a business model.
  • 151. Cost Structures Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model Cost Structures: cost-driven and value-driven (many business models fall in between these two extremes): 1. Cost driven
  • 152. Cost Structures Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model Cost Structures: cost-driven and value-driven (many business models fall in between these two extremes): 1. Cost driven 2. Value driven
  • 153. Cost Structures Cost structures can have the following characteristics: 1. Fixed costs
  • 154. Cost Structures Cost structures can have the following characteristics: 1. Fixed costs 2. Variable costs
  • 155. Cost Structures Cost structures can have the following characteristics: 1. Fixed costs 2. Variable costs 3. Economies of scale
  • 156. Cost Structures Cost structures can have the following characteristics: 1. Fixed costs 2. Variable costs 3. Economies of scale 4. Economies of scope
  • 157. Key Questions • How much will it cost to initially develop the value proposition? • What are the most important costs? • What’s the cost of your MVP? • What key resources and activities are most expensive?
  • 159. What does success look like?
  • 160. What can you learn?
  • 162. CONNECTICUT(STATE(RESULTS( POLICY DATA Between(2000(and(2010(( Between(2000(and(2010(( Raised$the$Age$from$16$to$18$ Status$offenders$removed$from$ deten)on$ Con)nuum$of$therapeu)c$and$ evidence^based$services$at$the$ community$level$ Progress$toward$reducing$ dispropor)onality$ Over$80%$of$youth$comple)ng$ supervision$without$re^arrest$ The$number$of$juveniles$referred$ to$the$court$is$down$30%$$ #ImpactAU2014$ Investment$in$family^based$services$ for$court^involved$youth$from$ $300,000$to$$39,000,000$ Recidivism$at$12$months$is$below$ 50%$
  • 163. NEW(YORK(POLICY(RESULTS( Between(2010(and(2012 New$&$Stronger$Rela)onships$Across$the$System$ Deeper$Knowledge$of$Programs$&$Services$ Significant$Policy$Changes:$The$Close$to$Home$&$Raise$The$Age$ Commitment$to$Data^Driven$Decision$Making$ Engagement$of$Local$Communi)es$ Empowerment$of$New$Stakeholders$ Exponen)al$Level$of$Original$Investment$ #ImpactAU2014$
  • 164. NEW(YORK(QUANTIFIABLE(RESULTS( Between(2010(and(2012 Juvenile$arrests$dropped$by$24%$ Juveniles$admiSed$to$deten)on$declined$by$23%$ Juvenile$proba)on$intake$cases$declined$by$20%$ Juvenile$pe))ons$filed$declined$by$21%$ Juvenile$admissions$in$state$placement$were$down$28%$ Number$of$youth$in$state$custody$declined$by$45%$ $ #ImpactAU2014$
  • 165. minimum viable product Barn Suppers. Image courtesy of Philip Dunda
  • 166.
  • 168. “Don’t test your ideas. Test the assumptions that have to be true to make your ideas work.” Teresa Torres
  • 169.
  • 170. Lean Startup Experiments Assumption Testing! Experiment Design! Hypothesis Participants !! Approach & Activities !! Expected Data & Actual Data Learning Goals & Outcomes Decision BMC Iteration
  • 171. criteria 1. Are there customers who will buy what you sell? What evidence do you have? 2. Who are your competitors? Not just for similar products but for funds, time, attention? 3. Why would customers use your product or service instead of the competition? How different are you from the competition? 4. How will you respond to new competition?
  • 172. criteria 5. Is this financially viable/sustainable? 6. Is this replicable and/or scalable? How will you increase your reach or impact?
  • 174.
  • 175. what makes a great pitch? 1. Start with why. 1. What’s the problem you’re solving.? 2. Why is it important? 3. What’s the impact? Use memorable facts, figures, anecdotes and metaphors. 2. What’s your solution? 3. Who’s your audience? 4. What do they value? 5. How is your idea different from others out there?
  • 176. what makes a great pitch? 6. Who are you partnering with? 7. What are you building on that already exists? 8. Where are you in the stage of implementing your idea? 9. What do you need to take the next step? 10. How can we help you get there? What would you like us to do? 11. Share your passion. 12. Finish with your tagline.
  • 178. thank you DAVID HOOD @DavidAHood JULIAN WATERS-LYNCH @jwaterslynch join the conversation on twitter with @VicHealth @DoingSomeGood #VHinnov doing something good